The FDA has published online letters sent to five personal genomics companies – 23andMe, Navigenics, deCODE Genetics, Knome and Illumina – informing the companies that they are manufacturing and selling medical devices without appropriate FDA premarket review and approval. No surprise that the news that the FDA has sent out letters to some of the most well-known providers of DTC genetic testing products is already making waves. (Daniel MacArthur was the first to point me to the AP story, and Mary Carmichael of Newsweek and Andrew Pollack of The New York Times were among the first to dive into the substance of the letters.)
Below, we will discuss the immediate and long-term implications of the FDA’s most recent regulatory actions for the five companies receiving letters, as well as for the DTC genetic testing industry. First, however, a review of the letters themselves is required. Each of the five two-page letters is signed by Alberto Gutierrez, Director of the FDA’s Office of In Vitro Diagnostic Device Evaluation and Safety (OIVD), and follows a similar format throughout. To gauge the impact of these letters we will take them paragraph by paragraph.
Well that was quick. On Tuesday, Pathway Genomics and Walgreens announced a partnership to sell a saliva collection kit for Pathway Genomics’ direct-to-consumer (DTC) genetic tests in Walgreens’ thousands of drugstores nationwide. Less than forty-eight hours later, after the FDA repeatedly voiced its concerns about the arrangement, Walgreens has hit the brakes.
According to an MSNBC story, the FDA sent a letter to Pathway “asking the test maker to show it has regulatory approval, or prove why [the test] should be sold without the agency’s blessing.” In response, Walgreens is “elect[ing] not to move forward with offering the Pathway product to our customers until we have further clarity on this matter.”
Back to the Drawing Board. Despite its obvious significance, it is hard to be surprised by this latest development. When the Director of the FDA’s Office of In Vitro Diagnostic Device Evaluation and Safety (OIVD) tells The Washington Post that you would be selling an “illegally marketed device” if you proceed as intended, you should know the letter is already in the mail and retreat to the drawing board as quickly as possible.
The direct-to-consumer (DTC) genetic testing marketplace is on the move again. Just last week, in Mapping the Personal Genomics Landscape, I wrote that “predicting precisely which consumer services will be offered and how, if at all, they will be regulated, is impossible. All we know is that personal genomics consumers ten years from now are certain to have many, many more options than they do today.”
Turns out we only needed to wait a week – not a decade – for the landscape to shift again. Earlier today, DTC provider Pathway Genomics announced that it was partnering with drugstore giant Walgreens to offer its genetic testing service through most of that chain’s 7,500 stores.
Is Walgreens the Tipping Point for Personal Genomics Regulation? At first blush, this might appear to be nothing more than a creative product partnership between a fledgling personal genomics company and a giant drugstore chain. As it turns out, there are early indications that the Pathway/Walgreens partnership could turn out to be a tipping point in the regulation of personal genomics.
Earlier this month, there was speculation that The New York Times was preparing a piece “attacking” the “fledgling industry” of personal genomics (see: Linda Avey Versus the New York Times). The article in question, by reporter Andrew Pollack, was published over the weekend and, in retrospect, it’s hard to see what all the hubbub was about.
The title (Consumers Slow to Embrace the Age of Genomics) fairly reflects the tone of the rest of the article, which is a factual assessment of the business of personal genomics. In his piece, Pollack brings forth a standard set of issues confronting 23andMe and its peers (including Navigenics, deCODEme and Pathway Genomics). All are familiar, and most drive at a central challenge for these companies: demonstrating the value of their services and identifying customers willing to pay for them. (In a short, separate article that appears alongside, Pollack raises (but does not attempt to resolve) a much more controversial issue: whether personal genomics products represent medical tests or recreational services.) By and large, Pollack points out these challenges to the business of personal genomics without passing judgment.
Another Tale of the Struggle of Personal Genomics, Full of Sound and Fury, Signifying…What? After a while, the personal genomics news cycle can begin to feel predictable. Recently, and not for the first time, there have been rumblings that personal genomics pioneer 23andMe is struggling. The most recent “news” appears to be a December SEC filing disclosing a $4 million payment to an unidentified 23andMe executive. Gene Expression and BNET have taken the opportunity to recycle some of the company’s previous financial struggles, including co-founder Linda Avey’s departure and a well-publicized round of fall layoffs, and to speculate broadly about the state of morale at the company in addition to the well-being of the personal genomics industry more generally.
Avey herself, perhaps unintentionally, has fueled speculation that something may be afoot with a pair of recent posts (the original post has now been combined with an update) on her own blog. Avey has launched a preemptive strike against what appears to be an upcoming New York Times piece that will “question the viability” of the personal genomics industry and “hits too close to home” for Avey not to comment. (Or, as GenomeWeb headlines it, Linda Avey Versus the New York Times.)
Perhaps all of the smoke signifies a smoldering fire at 23andMe. Then again, it may represent nothing more than periodic reverberations from the social media echo chamber, where common memes are repackaged and recycled at regular intervals.
Last week the GLR covered deCODEme’s announcement that it was offering existing customers of its main competitor, 23andMe, the opportunity to have their genomic data interpreted by deCODEme’s own service. For free.
Although somewhat surprising from a short-term commercial perspective, I generally liked the move by deCODE as a means to improve the company’s genomic data interpretation abilities. Here’s what I wrote at the time:
If interpretation proves to be one of the key differentiators between DTC genomics companies, as expected, deCODE (and other companies) should embrace opportunities to hone their interpretative platforms now, while the DTC commercial market remains relatively small.
As both Peter Aldhous of New Scientist and Daniel MacArthur of Genetic Future have pointed out, it appears that there is some honing to be done on deCODEme’s end. From ancestry confusion to interpretative errors in evaluating Alzheimer’s risk, deCODEme’s first attempt at genomic data migration has been an imperfect one. Would deCODEme have preferred a seamless launch to their 23andMe data migration service? Of course. But if the experiment now pays off in smoother data migration and interpretation for the company in 2010 and beyond, these first bumps in the road will soon be forgotten.
Daniel MacArthur of Genetic Future provides coverage of the decision by direct-to-consumer (DTC) genomics service provider deCODEme to offer existing 23andMe customers the ability to upload their raw 23andMe data to the deCODEme service. For free.
MacArthur correctly notes that the value of the genome scans provided by companies such as 23andMe and deCODEme lies not in the actual creation of raw genetic data but in the interpretation of that data, and wonders why deCODEme has decided to give that away for free. Here’s MacArthur’s take:
So, why the free offer? I’m guessing deCODEme is gambling (quite reasonably) that offering free uploads will attract a non-trivial number of 23andMe customers over to deCODEme’s interface. That then provides the Icelanders with an opportunity to give people a fair trial of their own interface, and hopefully to impress them with the quality and accessibility of the data provided.
That seems reasonable, and many 23andMe customers are likely already familiar with porting their raw genetic data to other interpretive tools – Promethease, for example – so perhaps this puts deCODE in front of a group of individuals who would not otherwise be in the market for a duplicative genome scan. (23andMe appears unconcerned by the prospect of a side-by-side comparison of its service with that of deCODEme.)
Read the rest of this entry »
If you’re a regular reader of the Genomics Law Report – or the Wall Street Journal for that matter – by now you have probably heard the news: deCODE genetics, Inc. has filed for Chapter 11 Bankruptcy protection.
Given deCODE’s recent financial struggles, this latest development is hardly a surprise. Indeed, two months ago, we anticipated this very event when we asked a hypothetical question: “What Happens if a DTC Genomics Company Goes Belly Up?” That’s precisely the question that deCODE’s customers and creditors are asking today.
In our original article, which was initially published in three parts on September 14, 15 and 16 at Genetic Future, we looked at the interplay between the privacy policies of DTC genomics companies and the relevant bankruptcy law statutes, and offered some educated guesses as to how courts and companies would handle the sale of a bankrupt company’s sale of its customers’ genetic information.
The coming weeks will see that analysis tested in Delaware bankruptcy court. In the meantime, there is a lot to unpack in this morning’s deCODE announcement.
Read the rest of this entry »
Last month, the Genomics Law Report prepared a three-part series entitled What Happens if a DTC Genomics Company Goes Belly Up? The series, which was originally published on Genetic Future (see Parts 1, 2 and 3), reviewed the privacy policies of several genomics companies to determine whether they prohibit the transfer of private data to third parties. We also discussed the fact that a bankruptcy court may approve such a transfer notwithstanding a policy to the contrary. In this post, we examine whether federal regulations may restrict the dissemination of private genomic data—including the new rules proposed earlier this month under the Genetic Information Nondiscrimination Act of 2008.
1. Is DTC Getting HIPAA? The Health Insurance Portability and Accountability Act of 1996 (HIPAA), the most prominent federal regulation governing the privacy of medical records, established the Privacy Rule to provide national standards for protected medical records. HIPAA’s Privacy Rule currently applies only to “covered entities” and business associates of covered entities. A covered entity is a health plan, health care clearinghouse, or a health care provider. Since a company providing genomic sequencing services is not a health plan or a health care clearinghouse, HIPAA will apply only if such a company is determined to be a health care provider or a business associate of a covered entity.
Read the rest of this entry »
Direct-to-consumer (DTC) genomics companies are not immune to the current recession. When TruGenetics, a new player in the DTC genomics space, announced in June that it would be handing out 10,000 free genome scans, both Genetic Future and the Genomics Law Report raised questions about the financial viability of its business model, particularly in the current economic climate. Sure enough, on August 21, TruGenetics announced that it had been unable to secure funding sufficient to support its business model as contemplated. Frequent readers know that TruGenetics is not the only DTC genomics company that is struggling. The financial struggles of deCODE Genetics have been well chronicled (see here, here and here) and even new market leader 23andMe has undergone a dramatic shift in its top management as it pursues a new round of financing.
Ultimately, it was a recent headline here at Genetic Future—“deCODE Genetics on the brink of insolvency”—that started us thinking: what would happen if an established DTC genomics company actually went bankrupt? More specifically, what would happen to the genomic (and other) data held by the company? Genomic data is likely to be the company’s most valuable asset. Can that data be sold off to help meet the company’s debts? Bankruptcy can be a confusing and arcane process, with real risks and uncertainties for companies, their creditors and their customers.